John Fairfax yesterday appointed Brian Evans as chief operating officer of its Australian metropolitan newspapers, reporting to CEO Fred Hilmer, in what is a curious decision to say the least. After all, Evans put his hand up for Fred’s job earlier this year but was knocked back by the board.

Does the Fairfax board really know what it is doing? They seem to be saying to Evans: “You weren’t good enough for the top job, but you are for the most important operational role in the company”. This is a company that has rabbited on about how it has cut fat and management in an effort to be more cost effective, yet flat reporting lines now seem to be out.

There is no doubt that Evans has shown up Rupert Murdoch’s Kiwi managers by extracting previously unseen value from the New Zealand operation since Fairfax bought it from News Corp’s INL for $1.1 billion in 2003. It was a performance worthy of promotion, hence the speculation that a few solid months running the Australian newspapers will see Evans replace Hilmer by the end of the year.

Evans will have direct responsibility “for the metro, regional and community newspapers and group operations”, according to the Fairfax statement. That makes him the heir apparent at Fairfax, vaulting over four other key pretenders to the throne – Michael Gill at Fairfax Business Publications, commercial director Alan Revell, operations chief Peter Graham and metropolitan newspapers boss Mark Scott.

Gill has received a reprieve and will still report directly to Hilmer, meaning Evans isn’t responsible for the Fin Review or BRW. But Scott, Revell and Graham must now be considering their positions. Multiple contributors to our anonymous tips box this morning are predicting that Alan Revell will be going as he is the commercial director and Fred Hilmer’s statement yesterday said Evans had been appointed to bring more “focus” to the business and drive “commercial initiatives”.

One tipper claimed that Revell even told his direct reports at a dinner last December that he would resign if Evans became CEO. The function at flash eatery Aria is being talked about widely this morning, although Revell could recant by saying that Evans is only COO.

Revell is in the gun as pressure mounts to stop the decline in classifieds and build internet market share. Brian Evans is a commercial hard man with 30 years on the business side of newspapers who won’t tolerate smooth talking non-performance.

Peter Graham, head of group operations and a former CEO of the NSW electricity giant Pacific Power who had Fred Hilmer as a chairman, is also rumoured to be planning his departure. Graham and Revell are said to have built little empires of consultants, strategists and support staff which are not creating enough value.

Metro newspaper boss Mark Scott has a smaller empire and is thought to be a little less precious as his promotion was more recent and he hasn’t been playing the games near the top of Fairfax for as long as Revell and Graham. Besides, Scott has more responsibility on the editorial side and Evans is a commercial man.

Fred Hilmer seems determined to finish strongly and has appointed Evans to take some belated hard decisions. It’s a shame that he sold $10 million worth of Fairfax shares at about $3.70 last September when the stock is today up 4c to $4.14. If Fred Hilmer now thinks his role is to focus on “strategic issues” it would have been nice it he’d retained some skin in the game.

Peter Fray

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